Think about it: the faster you get a product to market, the more income and profit you can generate. It scares the you-know-what out of me that most companies making products don’t yet embrace lean manufacturing, let alone lean product development.
When I started my engineering career, I worked for a company that manufactured auto parts. My job took me inside Canada’s vehicle assembly plants — some of the best in the world — where I watched hundreds of people working quickly and efficiently to roll out vehicles for top car companies. Since then, I’ve read about our country’s lagging productivity, a problem that’s left businesses and politicians worried about the future. It was hard for me to reconcile the non-stop work ethic I saw in front of me in some of those auto plants with what we now call Canada’s productivity gap.
It wasn’t until a few years into running my own product development engineering services company that it became clearer to me that boosting productivity was a much larger discussion, one that is not just limited to manufacturing. It extends to all business processes.
Canada’s newest federal budget contains new measures aimed at boosting our country’s lagging manufacturing industry. While buying some new equipment may make you feel like you’re doing something good, I believe there is more opportunity to be harvested from changing our methods, philosophies and habits. That kind of change comes for free. Alas, I forgot how complacentand lazy the developed world has become – I call that the wrong kind of Inertia.
It’s gotten to the point where it’s easier to try and buy your way out of a problem instead – tsk tsk.
Of course, there’s work to be done to improve manufacturing in North America. This can’t be ignored. Many companies are still reluctant to adopt lean manufacturing methods like the Toyota Production System. But what about boosting the productivity of product design and engineering? At Inertia, we’ve adopted many lean product development practices over the years as a way of establishing a competitive advantage and giving our clients remarkable ROI.
We recently helped a client launch a product. Over a two-year span, we developed the product all the way from the initial spark of an idea to the finished item on store shelves. While that two-year period doesn’t differ much from what it would have taken their competitor to do the same job, the situation under which the product was developed was quite remarkable.
Our client had little experience developing this exact type of product. Neither did we. Our development team was also much smaller compared to their larger corporate competitors. Despite this, together we designed, engineered and brought to market two radically new and game-changing technologies in that one product.
After we delivered the project, we sat down and quantified how much time we saved by accelerating the product development process with our lean product development practices. It was nearly four months! Two months after the launch, our client had ramped up to selling $1-million in product per month. By getting that product to market four months faster, we essentially got them $3-4 million dollars extra in their pocket.
If businesses really want to improve productivity, I believe they should consider the following:
- Stop talking about development cost alone and instead talk about ROI
- Start talking about lean product development methods as a vehicle to achieve maximum ROI, which also helps to minimize business risk
- Take the time to learn about lean product development methods and how to effectively implement them
What are your experiences and philosophies around the financial side of getting a product to market? Can you quantify the relationship between product development cost and time to market and the effect it has on your ROI? If not, you should.